VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
planning and environment LIST	vcat reference No. P996/2021
	
CATCHWORDS	
Planning and Environment List – Costs application pursuant to s 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) – Whether the Tribunal has power to award costs where it has determined that it does not have jurisdiction to determine the substantive dispute –  Proceeding determined on a preliminary question of jurisdiction before the merits hearing – Proceeding not determined pursuant to s 75 Victorian Civil and Administrative Tribunal Act 1998 (Vic) – Application for costs refused on grounds that it was not fair and reasonable to award costs given the complexity of the dispute and relative strength of the arguments – Duncan v Simon Parsons & Co [2009] VCAT 830 and Nazligul v AMP Investments Pty Ltd & Knox City Shopping Centre [1999] VCAT 1597 considered.	

Applicant	Josephine Avril Hogg 		

Respondent	Minister for Planning		
joined parties	Casey City Council, Rose & Maurice Hogg Gallery Ltd	
Interested party	Rosemaur Gallery Advisory Committee	
SUBJECT LAND	193-209 King Road
HARKAWAY  VIC  3806	
hearing type	Application for costs determined on the papers	
Date of order and reasons	4 November 2021	
citation	Hogg v Minister for Planning [2021] VCAT 1314	

Order
1	The third respondent’s application for costs pursuant to section 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) is refused. 

Justice Michelle Quigley
President

REASONS
Introduction 
1	On 23 September 2021, the Tribunal determined that it did not have jurisdiction to determine the Applicant’s application brought pursuant to s 39 of the Planning and Environment Act (Vic) 1987 (P&E Act). One of the respondents to the application, Rose and Maurice Hogg Gallery Ltd (Hogg Gallery) has applied for an order under s 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act) that the Applicant pay the their “costs of, and incidental to, the application”. 
2	The applicant opposes an award of costs submitting that:
2.1	s 109(2) of the VCAT Act does not confer power on the Tribunal to award costs in a matter such as this where it has found that it has no jurisdiction; 
2.2	alternatively, if the Tribunal does have jurisdiction, the Tribunal should not be satisfied that is fair to do so having regard to, amongst other things, the approach the Tribunal has taken in respect of unsuccessful s 39 P&E Act applications in the past; moreover, the question of the whether Tribunal had jurisdiction involved a genuine question of statutory interpretation.
3	Hogg Gallery submits that it is fair to make an award of costs in this matter having regard to both the nature of the proceeding brought in the Tribunal’s original jurisdiction, (including its complexity), and the relative strengths of the claims made by the parties.
4	As the Applicant’s submissions were filed by way of reply, the Hogg Gallery was not aware of the jurisdictional point raised by the Applicant in its defence of the costs application.
The Tribunal’s jurisdiction to award costs
5	The Tribunal is a creature of statute. It does not have inherent jurisdiction to award costs. The power to award costs is set out in s 109 of the VCAT Act. In some circumstances an enabling enactment may provide another power in respect of costs. 
6	However, in respect of s 39 applications under the P&E Act, there is no additional costs power available to the Tribunal. Thus the power to award costs is confined to section 109 of the VCAT Act.
7	The applicant submitted that the Tribunal’s decision in Duncan v Simon Parsons & Co ought to be preferred in the analysis of jurisdiction to award costs in this matter where the proceeding was determined to be without jurisdiction as a preliminary question. 
8	This was not an application under s 75 of the VCAT Act (which provides for an award of compensation for any costs, expenses, loss, inconvenience and embarrassment resulting from the proceeding). The Tribunal did not purport to exercise its jurisdiction pursuant to s 75, but rather the matter proceeded as a preliminary question as to jurisdiction. The date for the merits hearing had already been scheduled. It might be argued that by implication the request to determine the preliminary question as to jurisdiction was requesting the Tribunal to exercise its discretion pursuant to s 75. If that were the case s 75(2) would empower costs to be considered.
9	In Duncan, the Tribunal held that s 109(2) does not confer power on the Tribunal to award costs in a matter where it had no jurisdiction. The Tribunal held that while s 109(2) was widely drawn, it was not sufficiently wide to cover the award of costs where the Tribunal lacked jurisdiction. The Tribunal noted that if the legislature had intended the Tribunal to entertain an application for costs despite the absence of jurisdiction, it could have included a provision similar to s 55 of the County Court Act 1958 (Vic).
10	It was argued that the power to award costs in s 109(2) does not expressly confer power on the Tribunal to award costs where the Tribunal finds it lacks jurisdiction. In this regard, s 109(2) stands in contrast to s 55 of the County Court Act 1958 (Vic), which provides: 
Whenever an action or matter is commenced over which the court has no jurisdiction, the judge or associate judge, as the case requires, shall, unless the parties consent to the court having jurisdiction, order it to be struck out, and shall have power to award costs in the same manner, to the same extent, and recoverable in the same manner as if the court had jurisdiction there and the plaintiff had not appeared or had appeared and failed to prove his demand or complaint. 
11	The Tribunal in Duncan expressly disagreed with the earlier Tribunal decision of Nazligul v AMP Investments Pty Ltd & Knox City Shopping Centre where the Tribunal, having found itself without jurisdiction, proceeded to award costs on the basis that “having jurisdiction sufficient to consider the jurisdictional issues it must follow that I have power to award costs with respect to the matter”. The Tribunal in Nazligul reached that conclusion “[w]ith some hesitation”. The Applicant argued that the approach in Nazligul is contrary to the established principles set out at paragraph 5 above, and the Tribunal in Nazligul did not refer to those principles. The Applicant referred to the comments of the Tribunal on the reasoning in Nazligul in Halantas v Velos Lawyers: “[i]t is necessary in a practical sense for a court or tribunal to have power to determine whether it has jurisdiction, but it is not necessary in a practical sense for it to have power to make an order for costs associated with the determination about jurisdiction”.
12	The Applicant submitted that the Tribunal’s decision in Duncan was correct, arguing that there is nothing in s 109(2) that necessarily implies that the Tribunal has the power to award costs in respect of a matter in which it has determined it has no jurisdiction. Section 109(2) refers to the award of costs “in a proceeding”. It was argued that this is akin to the general power to award “costs of a proceeding” which was held in Horne v Frank not to extend to costs in a matter where the jurisdiction (of the Queensland District Court) was not validly invoked.  
13	The Applicant argued that the power in s 109(2) is more confined in scope than other provisions which have been held to confer on tribunals the power to award costs notwithstanding a determination by the tribunal that it lacked jurisdiction. In particular two New South Wales decisions were referred to: 
13.1	In Brett Wolinski Building Pty Ltd v HIA Insurance Services Pty Ltd, the relevant provision provided that the Consumer Trader and Tenancy Tribunal “may … award costs in relation to proceedings before it” where “costs” was defined to include “costs of or incidental to proceedings in the Tribunal, and the costs of or incidental to the application” (emphasis added). The NSW Supreme Court held  that, as the provision set out a power to award costs incidental to an application to the Tribunal, by necessary implication it provided a source of power for the award of costs where the Tribunal was without jurisdiction. 
13.2	In Wilson v Chan and Naylor Parramatta Pty Ltd, a case where the jurisdictional issue arose from the inability of non-courts to exercise federal judicial power, the NSW Court of Appeal held that the NSW Civil and Administrative Tribunal’s (NCAT) power under s 60(2) of the Civil and Administrative Tribunal Act 2013 (NSW) to award costs “in relation to proceedings before it” extended to the award of costs in favour of a respondent who successfully contends that NCAT lacks jurisdiction to hear the substantive claim advanced by the applicant. Leeming JA (Macfarlan JA agreeing) emphasised the words “in relation to” in concluding that the power in s 60(2) was a broadly worded one. Those words of wide import do not appear in s 109(2) of the VCAT Act. 
14	In view of the Tribunal’s previous decision in Duncan, the principles set out at paragraph 5, and the text of s 109(2) of the VCAT Act, it was submitted that s 109(2) did not permit the Tribunal to make the costs order sought by the Hogg Gallery.  
15	I do not agree that the New South Wales decisions referred to demonstrate that the words used in s 109 are necessarily more confined.  
16	The question of jurisdiction to award costs is one of statutory construction. As noted by other divisions of the Tribunal and by the Supreme Court the power to award costs is wide, albeit not unconstrained.
17	The words of s 109(1) of the VCAT Act provide, “subject to this Division, each party is to bear their own costs in the proceeding.” (emphasis added). 
18	At s 109(2) the VCAT Act provides that “at any time, the Tribunal may order that a party pay all or a specified part of the costs of another party in a proceeding.” 
19	Section 3 of the VCAT Act provides a definition of ‘proceeding’ which is of little assistance in the context of this dispute.  
proceeding means a proceeding in the Tribunal, including—
(a) 	an inquiry conducted by the Tribunal, including an inquiry under section 141 of the Equal Opportunity Act 2010;
or
(b) 	a compulsory conference under section 83; or
(c) 	a mediation under section 88; or
(d) 	a rehearing or reassessment under Part 7 of the Guardianship and Administration Act 2019;
20	The decision in Nazligul has been followed by other divisions of the Tribunal where it has held that it has power to award costs under s 109(2) in respect of a proceeding that has been dismissed or struck out for want of jurisdiction. I note that the decisions which have held to the contrary, being Duncan and Juanillo, are both decisions of the same member of the Tribunal. In my view a proceeding is a proceeding in the Tribunal until it is disposed of. That may well be by final determination on the merits, or by a finding that there is no jurisdiction in the Tribunal to hear it on the merits. There was a proceeding on foot until the Tribunal finds and determines otherwise. I consider it would be a fiction to conclude that there was no proceeding on foot here at all at any time that did not fall within the scope of s 109.  
21	There remains an inconsistency between divisions of the Tribunal in the analysis of this issue where it arises in a finding of lack of jurisdiction as a preliminary question. Usually, the question of lack of jurisdiction arises in an application brought pursuant to s 75. In those matters where there is a finding of lack of jurisdiction the question of reliance on s 109 does not arise as s 75 specifically provides for a power to award costs which is distinct from the general power found in s 109.  
22	In any event, the ultimate decision on costs here is moot as I am not persuaded there ought to be an award of costs pursuant to the factors called up by s 109 nor pursuant to s 75(2). 
Discretion to award costs – section 109 or section 75(2) VCAT Act
23	The power to award costs under s 109 requires the Tribunal to be satisfied that it is fair to do so having regard to the matters set out in s 109(3).
24	Hogg Gallery relies on s 109(3)(c) (the relative strengths of the claims made by each of the parties), and s 109(3)(d) (the nature and complexity of the proceeding). 
25	I am not persuaded that it would be fair to award costs against the Applicant having regard to the nature of the application, being one made under s 39 of the P&E Act, nor the question of statutory interpretation involved in the jurisdictional issue
26	I do not accept that whether the application was in the original rather than review jurisdiction of the Tribunal has any weight in this case. The fact that it was an unusual and somewhat complex question of statutory interpretation may equally well have arisen in the Tribunal’s original or review jurisdiction.
27	Section 109 does not draw any distinction between the two types of jurisdiction exercised by the Tribunal. I note that some parallels have been drawn between the complexity of litigation in other courts with matters which may fall within the Tribunal’s original jurisdiction. That distinction is not determinative of itself. 
28	The complexity of the issue being one which benefited from the presence of counsel cuts both ways in my view with respect to costs, as does the complexity or novelty of the argument.
29	I am of the view that the Tribunal benefitted from the assistance of counsel in determining the question of construction and hence jurisdiction. The fact that the Tribunal was able to decide the matter immediately did not reflect the sophistication and complexity of the arguments raised by the parties but rather the quality of the respective submissions and the ability to consider those submissions in writing prior to the oral arguments presented by counsel at the hearing. If the clarity of the competing positions had not been put in writing and well argued on the day the Tribunal would not have been so well assisted.
30	The question of jurisdiction arising from s 39 of the P&E Act was a novel question and one which has benefited the relevant planning law jurisprudence. In this, I am of the view that this is a good reason why costs should remain where they fall. 
31	In terms of the relative strength of claims made by the parties, the comments made above are equally applicable. The jurisdictional question involved a genuine question of statutory interpretation and the arguments raised by both parties were carefully articulated and researched notwithstanding the applicant was ultimately unsuccessful in persuading the Tribunal to support her view.
32	I note also the Applicant argued that matters relevant under s 109(1)(e) which are relevant to the exercise of discretion to award costs would include:
32.1	duplication across the submissions of the respondents. Inevitably the arguments made by Hogg Gallery largely duplicate arguments made by the other respondents;
32.2	the applicant sought to cooperate to seek to ensure the efficient conduct of the proceeding. To the extent that Hogg Gallery application for costs includes costs of preparing for the substantive hearing, requiring the applicant to bear those costs would add a further element of unfairness; and
32.3	Hogg Gallery did not file and serve its application to costs by the date ordered by the Tribunal and the applicant accordingly assumed no application would be made. No explanation was provided for the late service.
33	I do not give these factors any effective weight. The issues which are of particular relevance in my view here are the questions of the relative strength of the parties’ arguments and the nature and complexity of the proceeding. In each of these aspects I am not persuaded that it would be fair in the circumstances to award costs to Hogg Gallery. Each party is to bear their own costs in the proceeding.
34	If the question of costs would be considered pursuant to s 75(2), I would form the same view as to the merits and costs would lie where they fall.
Conclusion
35	I have not had the benefit of any opposing submissions on the jurisdictional question raised by the applicant notwithstanding giving all respondents an opportunity to be heard on the question. I note that neither the Minister nor the Council sought costs and did not wish to make submissions in respect of the jurisdictional question.
36	Nothing further was received from Hogg Gallery.
37	I note that there is a division of view as to the ability to award costs where the Tribunal has found that it has no jurisdiction.
38	The question is in fact moot as I have considered that assuming there is jurisdiction to award costs either pursuant to s 109 or s 75(2), I would not award costs, and costs would lie where they fall.
39	The Hogg Gallery application for costs is refused. There will be no order as to costs.

Justice Michelle Quigley
President